Demographics, Economics and the Minnesota Budget: The Impact on Disability Employment Tom Gillaspy, State Demographer Mn Dept of Administration May 2010.

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Presentation on theme: "Demographics, Economics and the Minnesota Budget: The Impact on Disability Employment Tom Gillaspy, State Demographer Mn Dept of Administration May 2010."— Presentation transcript:

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Demographics, Economics and the Minnesota Budget: The Impact on Disability Employment Tom Gillaspy, State Demographer Mn Dept of Administration May 2010

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U.S. Employment Not Expected to Return to Pre-Recession High Until Spring 2013

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Employment Drops More Sharply For Workers With A Disability BLS Table A-6

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The Economic/Demographic Environment Has Changed for as Far as We Can Forecast Short run economic cycle has merged with long run demographic cycle We have entered the Age of Entitlement—economic growth in the next 25 years will be slower than what it was in the past 25. This is a national/global issue

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Some Labor Force Dynamics Of The Teens Slow recovery of jobs will limit new job openings Increased retirements will increase openings Large pool of unemployed and continued immigration will compete for job openings Slow growth of labor force will ease job pressures some Many jobs are permanently disappearing, especially transformational and transactional

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The Great Recession Has Raised the Level of Social Angst But What Is Really Happening Is That We Have Entered A “ N e w N ormal”

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But Why Fear The New Normal? It Plays To Our Strengths! Future economic growth will depend increasingly on increasing productivity and less on labor force size Education has been the key to Minnesota’s productivity and prosperity Future productivity increases will depend on decisions and the investments we make now Public Sector Productivity Growth Will Be Essential

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If State Health Care Costs Continue Their Current Trend, State Spending On Other Services Can’t Grow General Fund Spending Outlook, presentation to the Budget Trends Commission, August 2008, Dybdal, Reitan and Broat

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Minnesota Faces a Fiscal Trap 1.The issue is a long run, structural one— short run solutions will not solve the problem 2.Trend growth alone will not be sufficient. Fundamental changes are necessary 3.Revenue growth will slow. Efforts to increase it will be met with resistance 4.Spending pressures will increase driven largely by issues of aging and health 5.State spending will shift its focus from education, infrastructure and higher education to care and support of the aging

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